Lesch, Ronald B. v. Crown Cork & Seal Co ( 2002 )

In the
United States Court of Appeals
For the Seventh Circuit
No. 00-4239
Ronald Lesch,
Plaintiff-Appellant,
v.
Crown Cork & Seal Co.,
Defendant-Appellee.
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 00 C 1715--Suzanne B. Conlon, Judge.
Argued May 15, 2001--Decided February 28, 2002
Before Ripple, Manion, and Diane P. Wood,
Circuit Judges.
Diane P. Wood, Circuit Judge. At the age
of 61, Ronald Lesch’s career as the
comptroller of Crown International
Management Systems (CIMS), a division of
Crown Cork & Seal Co. (Crown), came to an
abrupt end when Crown acquired a French
company and decided it no longer needed
CIMS to provide certain accounting
services it had previously used. Lesch
believed that age discrimination lay
behind the loss of his job, given that a
man 11 years his junior was selected to
head the new Corporate Technologies (CT)
accounting group, and given the fact that
the CT group took over some non-CIMS
accounting work Lesch had formerly
overseen. Following his forced early
retirement, Lesch filed a timely
complaint with the EEOC alleging that
Crown violated the Age Discrimination and
Employment Act (ADEA), 29 U.S.C. sec. 621
et seq., by dismissing him from his
position and replacing him with someone
younger. After receiving his right-to-sue
letter, Lesch filed a claim in federal
district court. The district court
granted summary judgment to Crown, which
we affirm.
I
Lesch’s termination was undoubtedly
painful; by the time he left, he had
worked for CIMS for almost 40 years. As
of 1997, when he was 61, he was the
comptroller, or head accountant, for what
was then Crown’s division in charge of
international operations. Early that
year, Crown had decided to consolidate
its accounting operations for both CIMS
and CT under Lesch’s supervision. On the
recommendation of Judith White, one of
CT’s executive staff, Siegfried Genutis
was brought in to take primary
responsibility for CT’s accounting work.
Genutis had relatively little formal
experience in accounting methods, but he
had extensive expertise in computers and
the software used to compile and generate
reports from financial data. When Genutis
joined the CIMS accounting group, Lesch
assigned Douglas Pittman, a staff
accountant, to train Genutis in the
group’s accounting methods. Before long,
Genutis, while technically still under
Lesch’s supervision, was almost
exclusively working directly with White
on CT’s accounting projects.
Around the same time, Crown acquired
Carnaud Metal Box, a French company that
specialized in many of the same overseas
product development and management
services that CIMS provided. Crown
decided to eliminate the duplication by
phasing out the CIMS division and
terminating all of its employees. CT, in
contrast, was not slated to lose any
positions as a result of the acquisition.
Instead, new arrangements had to be made
for meeting CT’s accounting needs.
White had the responsibility of
establishing a new, stand-alone CT
accounting group, drawing from the CIMS
accounting staff. She wanted the head of
the CT group to be a strong manager, but,
just as importantly, she wanted someone
with the necessary information technology
expertise to help advance the
computerization of accounting operations
at Crown. Based upon these criteria, and
the fact that she had found him to be a
highly competent accountant who
understood CT’s accounting needs, White
selected Genutis to head the CT group.
White also selected three junior level
accountants for the group, one of whom
was Douglas Pittman. At the time, Genutis
was 50 and Pittman was 53.
When the unwelcome word reached Lesch in
early 1997 that his CIMS comptroller
position was slated for elimination, he
approached Fred Leh in Crown’s Human
Resources Department about finding an
alternative position. Lesch did not want
to retire before he turned 65 and
indicated to Leh his willingness to take
even a demotion in order to remain with
the company. At the time, Lesch was not
aware of White’s plans to use accountants
from the CIMS group to meet CT’s
accounting needs. As part of Leh’s search
for alternative positions, however, Leh
learned that White had chosen to retain
Genutis rather than Lesch to lead the
revamped CT group. It is unclear from the
record whether Leh discussed with White
the possibility of Lesch’s taking one of
the entry level accounting positions, but
White later wrote Leh an e-mail note in
which she explained that she had never
considered Lesch for the entry level
positions because of his status as a
senior manager.
Despite his attempts, Leh was unable to
find any alternative position for Lesch
within Crown, and Lesch was forced into
early retirement on September 30, 1998,
the day the position of CIMS comptroller
was officially eliminated. Lesch
subsequently filed a charge with the EEOC
alleging that he had been terminated from
his position because of his age in
violation of the ADEA. He further alleged
that his position at Crown had not been
eliminated and that Genutis, a
substantially younger employee, had been
promoted to fill it. Based on the EEOC’s
right-to-sue letter, Lesch filed the same
"discriminatory termination" claim in the
district court.
The theory of the case that Lesch
initially presented to the EEOC and to
the district court was that although CIMS
had been phased out, the job of manager
of CT’s accounting projects (which Lesch
had held) remained, and rather than
retaining him to continue those duties,
Crown fired him and promoted Genutis. By
the time the case reached the summary
judgment stage, however, Lesch had
reframed his theory of the case into
something that looked much more like a
"failure to transfer" claim. He conceded
that all positions in the CIMS accounting
group had been eliminated in the
reduction in force--including those
relating to CT’s accounting work--and
alleged instead that Crown had
discriminated against him on the basis of
age by failing to transfer him to a new
CT group position. In support of this
claim, he pointed to Genutis and Pittman
as younger workers who were transferred
despite their being less qualified than
he was to fill the positions.
For purposes of its analysis, the
district court proceeded as though Lesch
were arguing separate claims, one
fordiscriminatory termination and another
for failure to transfer. The court
granted summary judgment to Crown on
Lesch’s discriminatory termination claim.
It dismissed his failure to transfer
claim, principally because it was not
encompassed within his EEOC charge, and
alternatively on the merits.
II
When a case is dismissed at the summary
judgment stage our review is de novo.
Trahant v. Royal Indem. Co., 121 F.3d
1094, 1095 (7th Cir. 1997). We consider
the evidentiary record in the light most
favorable to the non-moving party, in
this case Lesch, and draw all reasonable
inferences in his favor. Summary judgment
is only appropriate where the record
discloses no dispute as to any material
fact. Taylor v. Monsanto Co., 150 F.3d
806, 808 (7th Cir. 1998).
Before going any further, we need to
clarify exactly what theory or theories
Lesch has preserved at this stage of the
case. As we said, over the course of this
litigation, Lesch has advanced two
distinct claims under the ADEA, one for
discriminatory termination, another for
discriminatory failure to transfer. The
district court correctly observed that
his EEOC charge mentioned only the
discriminatory termination claim. Lesch
is bound by the charges he filed with the
EEOC. Ritter v. Hill ’N Dale Farm, Inc.,
231 F.3d 1039, 1045 (7th Cir. 2000). This
means, as the district court concluded,
that the failure to transfer claim was
not properly before the district court.
As such, it is not properly before us
either, even if we read the charges of
discrimination liberally. Id.Affirming this aspect of the district
court’s opinion would normally be of
relatively little consequence, as long as
the discriminatory termination claim
Lesch actually raised in his EEOC charge
was still in the case. But there is an
issue about this very point. Lesch’s
entire appellate argument has been framed
in terms of a discriminatory failure to
transfer him to the CT group--the claim
he did not raise with the EEOC. He
contends that the reasons Crown gives for
choosing both Genutis and Pittman over
him for the new CT group are pretextual.
We must therefore decide whether Lesch
has waived any potentially appealable
issues he might have had on his
discriminatory termination claim.
Although the question is close, we
conclude that nothing Lesch has done
prevents us from reaching the merits of
this issue. Crown has itself waived any
opportunity to rely on any omissions
found in Lesch’s brief. See, e.g., Soo
Line R.R. Co. v. St. Louis Southwestern
Ry., 125 F.3d 481, 483 n. 2 (7th Cir.
1997). Crown did not urge us to affirm
the district court’s judgment on the
theory that the only claim Lesch
preserved for appellate review was the
flawed transfer one. Furthermore, on
these facts there is not a very
sharpdistinction between the two
characterizations of what happened at
Crown. On the one hand, Lesch’s job title
was eliminated, as was the CIMS
accounting group that he directed. The
directorship of the CT group position
could thus be viewed as a new position
into which Crown chose to transfer
Genutis rather than Lesch. On the other
hand, certain activities that Lesch had
previously overseen-- specifically, CT’s
accounting projects--remained after the
CIMS phase-out. In this sense, the CT
group director might be viewed as a
continuation of Lesch’s job under a new
name. The line between arguing that
Genutis was promoted into Lesch’s
position and arguing that Genutis was
hired over Lesch for a new position is
thus a fine one. We will therefore
address Lesch’s arguments to the extent
that they pertain to the discriminatory
termination claim.
Lesch’s claim that he, rather than
Pittman, should have been given one of
the junior accountant positions in the CT
group is the one that is not properly
before us. That claim cannot be construed
as anything other than an argument that
Crown discriminated in choosing whom to
transfer into the CT group. We note for
the sake of completeness that even if we
were to consider Lesch’s claim with
respect to the junior accounting
position, the district court’s decision
appears to be correct. At 53, Pittman was
presumptively not "substantially younger"
than Lesch, and Lesch thus failed to
identify someone similarly situated but
substantially younger who was transferred
to a junior accounting position. See
Taylor v. Canteen Corp., 69 F.3d 773, 780
(7th Cir. 1995). Lesch also failed to
present sufficient evidence that Crown’s
explanation for not considering him for
the junior accounting position--that it
was a position significantly junior to
his own--was pretextual. We note in this
context that it is legitimate for an
employer to deem someone over-qualified,
as well as under-qualified, for a
position. See Dalton v. Subaru-Isuzu
Automotive, Inc., 141 F.3d 667, 679 (7th
Cir. 1998).
Because there is no direct evidence of
age discrimination in this case, Lesch
has proceeded using indirect evidence and
the burden-shifting approach first
articulated in McDonnell Douglas Corp. v.
Green, 411 U.S. 792 (1973). Under
McDonnell Douglas, it was Lesch’s burden
to make out a prima facie case. To the
extent he was pursuing a discriminatory
termination theory, he was required to
present enough evidence to create a
triable issue of fact on each of the
following elements: 1) he is a member of
the class protected by the statute; 2) he
reasonably performed to his employer’s
expectations; 3) he was terminated; and
4) the position remained open or he was
replaced by someone substantially
younger. See, e.g., Radue v. Kimberly-
Clark Corp., 219 F.3d 612, 617 (7th Cir.
2000). Where, as here, an employee is
terminated pursuant to a reduction in
force, the fourth element can also be
satisfied by showing that similarly
situated, substantially younger employees
were retained. Michas v. Health Cost
Controls of Ill., Inc., 209 F.3d 687, 693
(7th Cir. 2000). Under the normal
McDonnell Douglas analysis, once Lesch
substantiated his prima facie case, the
burden would shift to Crown to articulate
a legitimate non-discriminatory reason
for terminating or failing to transfer
Lesch. If Crown was able to do so, then
Lesch had to muster sufficient evidence
to convince a rational jury that Crown’s
justifications were pretextual. Beatty v.
Wood, 204 F.3d 713, 717 (7th Cir. 2000).
It is not always necessary to march
through this entire process if a single
issue proves to be dispositive. Here, as
is often true, that issue is pretext or
the lack thereof. Crown articulated
several legitimate business
justifications for Lesch’s termination.
To meet his burden of showing pretext,
Lesch had to present sufficient evidence
that the proffered reasons for the
termination had no basis in fact, that
they did not actually motivate Crown’s
decision, or that they were insufficient
to motivate the decision. Collier v. Budd
Co., 66 F.3d 886, 892 (7th Cir. 1995). He
has not done so.
Crown’s principal justification for its
decision to terminate Lesch was that the
CIMS comptroller position had been
eliminated as part of the phasing out of
CIMS. Lesch contends that this
justification was pretextual, because, he
claims, the e-mail from White to Leh
shows that the position was not really
eliminated. He wonders why else White
would be explaining to Leh her choice to
make Genutis and not Lesch the head of
the CT group. But the e-mail does not
indicate that the CIMS comptroller
position was merely being relabeled or
continued in some respect. It is
consistent instead with Crown’s assertion
that it was eliminating the CIMS
comptroller position as part of a
reorganization and that Crown was
creating a new entity with new accounting
positions to take over CT’s accounting
work. The fact that the head of the CT
group would have some of Lesch’s old job
responsibilities is not enough to create
a genuine issue of fact on the bona fides
of Crown’s motivations.
Lesch also suggests that evidence of
pretext can be found by looking at
White’s justifications for choosing
Genutis over him, but here, too, he does
not present enough to go forward. When
Crown decided that CIMS was no longer
necessary, it was White’s responsibility
to determine who from the disbanded CIMS
group would head up the new CT group. In
an e-mail to Leh, White explained her
decision to appoint Genutis rather than
Lesch to run the CT group:
[Genutis] had been heading up the
accounting for Corporate Technologies
ever since he joined the Alsip accounting
group for the purpose. He had done a fine
job for me and understood better than
anyone else the requirements and was the
obvious candidate to lead the team.
She also explained that she perceived
Lesch’s job for CIMS as "far more a case
of getting the books right than
participating in management decisions
which was the role I expected [Genutis]
to play," and that she believed that with
the exception of certain technical
issues, the two men were
"interchangeable" in terms of accounting
skills. Finally, she observed that "the
CT work required more & more use of PC’s
and this was a skill that [Lesch] did not
pick up but that [Genutis] introduced to
the department, training both the new
people and the 3 original staff."
These are all legitimate business
reasons for terminating Lesch and
assigning his remaining duties to
Genutis. Moreover, while Lesch has
attacked some of the reasons on appeal,
he has said nothing about others. This
alone dooms his effort to establish
pretext. Where an employer offers
multiple independently sufficient
justifications for an adverse employment
action, the plaintiff-employee must cast
doubt on each of them. See Walker v.
Glickman, 241 F.3d 884, 890 (7th Cir.
2001). Here, Lesch has no evidence to
suggest that White did not or could not
believe that Genutis was the "obvious"
candidate to fill the position because he
was most familiar with CT’s accounting
projects, had been doing a good job for
her, and was sufficiently competent as an
accountant to lead the group. Nor has
Lesch identified evidence showing that
Genutis was not, in fact, more familiar
with CT’s accounting needs than Lesch, or
that Genutis was not doing a good job for
White. And there is certainly no evidence
that White did not believe these things
to be true. There is evidence in the
record to indicate that White might have
been mistaken about whether Lesch
andGenutis were largely "interchangeable"
in terms of their accounting skills,
given that Genutis was quite new to the
field, but Lesch has not offered evidence
to suggest that, based on her work with
Genutis, White could not have had this
perception. "On the issue of pretext our
only concern is the honesty of the
employer’s explanation," O’Connor v.
DePaul Univ., 123 F.3d 665, 671 (7th Cir.
1997), and Lesch has not cast doubt on
the honesty of White’s belief.
Lesch specifically challenges only two
of White’s stated justifications for
choosing Genutis: (1) his superior
ability as a manager, and (2) his
superior knowledge of computers. With
respect to the first, Lesch offered
affidavit testimony that he was, in fact,
a skilled manager and that he had
originally limited Genutis’s direct
contact with White out of concern about
Genutis’s ability to work with other
managers. Lesch’s affidavit cannot,
however, tell us anything about whether
White genuinely believed that Lesch’s
CIMS position was less managerial and
more technocratic, or that Genutis would
be a better participant in managerial
decision-making. See, e.g., Ost v. West
Suburban Travelers Limousine, Inc., 88
F.3d 435, 441 (7th Cir. 1996).
Lesch’s attempt to cast doubt on White’s
asserted preference for someone with
superior computer skills is similarly
unavailing. Accounting is a profession
(like many others) that has become
increasingly computerized in recent
years. The uncontroverted evidence in
this record establishes that CT was
moving toward a more computer-reliant
system of accounting. There is also no
question that Genutis’ understanding of
computers and dexterity with accounting
software was far superior to Lesch’s;
Genutis came to CIMS from a computing job
and, as White mentioned in her e-mail to
Leh, it was Genutis who trained Lesch’s
staff in the use of computers and
accounting software. On appeal, Lesch
goes to great lengths to demonstrate that
he was not completely computer-
illiterate--he could use a keyboard, he
could open and save Excel files, and he
could input data into spreadsheets. All
this may be true, but it is beside the
point. There is much more to
computerizing a company’s accounting
activities than knowing how to open an
Excel file, and Genutis was known to have
far more of the requisite skills. Much
more so than Lesch, he was well versed in
information technology and how it could
be used to make accounting operations
more efficient. White was entitled to
rely on this skill difference in choosing
between Lesch and Genutis, and there is
no evidence that her claim to have done
so was a lie.
Lesch has thus failed to meet his burden
of creating a triable issue of fact on
the critical question of pretext. This
failure in turn means that he did not
have enough evidence to survive summary
judgment on his discriminatory
termination claim and to proceed to a
full trial. This problem, coupled with
the fact that his failure to transfer
claim is not cognizable, leads us to
Affirm the district court’s grant of
summary judgment to Crown.